Lieutenant General Charles Cornwallis had left 1,400 British troops under the command of Lieutenant Colonel Charles Mawhood in Princeton, New Jersey. Following a surprise victory at the Battle of Trenton early in the morning of December 26, 1776, General George Washington of the Continental Army and his council of war expected a strong British counter-attack. Washington and his council decided to meet this attack in Trenton.

On December 30, he crossed the Delaware River back into New Jersey and, over the next few days, massed his troops on higher ground south of Trenton, across a stream running through downtown called Assunpink Creek. On January 2, 1777, the day-long march ended when the larger British army led by General Cornwallis encountered Washington's own army. Small groups of American soldiers had succeeded in slowing Cornwallis' march from Princeton to Trenton, but the British force arrived en masse in the late afternoon. The armies were facing each other from 200 yards (200 m) apart with only the creek and the bridge in between. Cornwallis ordered the assault. Cannon and rifle fire erupted from Washington's side leaving heavy British casualties after fierce fighting. The bridge held, darkness fell, and Cornwallis withdrew. Hundreds of British soldiers were recovered from the bridge ending the Second Battle of Trenton. That night, Washington's army built up their campfires before silently slipping away after midnight while an unsuspecting Cornwallis slept. Cornwallis had failed to post adequate scouts to detect movements by Washington's army.

Washington and his staff decided to sneak away in the night, marching around the British forces and attacking their rear in Princeton. The Americans left a token force to build fortifications as though they were planning to defend at the creek and to disguise the sound of their march. British forces perceived the movement, but Cornwallis believed this to be Americans planning a night attack and ordered British troops into defensive positions, allowing Americans to successfully march their army around Cornwallis and start the Battle of Princeton. About 40 Americans died in this battle.